Understanding Managed Care

• Managed care has revolutionized the healthcare industry by changing the role of insurers.
• Insurers now actively manage healthcare delivery systems, not just pay claims.
• Insurers analyze data to design systems that maximize the value of healthcare spending.
• Through managed care, insurers collaborate with providers, businesses, and consumers.
• Managed care affects nearly every aspect of the healthcare industry.

Defining Managed Care

• Managed care is a healthcare system that manages utilization, quality, and cost of services.
• Resources and services are monitored to ensure costs stay within insurance company reimbursement limits.
• Today managed care is a broad term for a range of services.
• Health maintenance organizations (HMOs) are a type of managed care program.
• Managed care offers a variety of structures, including HMOs and PPOs, that are still evolving.

Basic Characteristics of Managed Care Organizations

• Managed care health plans integrate interdependent systems to deliver healthcare services to a specific population.
• Arrangements with selected providers furnish a comprehensive set of healthcare services to members.
• Credentialing standards are used for selecting healthcare providers.
• Quality assurance and utilization review programs are in place.
• Financial incentives encourage members to use providers and procedures associated with the health plan's network.
• Managed care offers the best opportunity to demonstrate the private sector's effectiveness in containing healthcare costs.

Integrated Delivery Systems

• Integrated delivery systems (IDSs) are healthcare networks providing coordinated, organized, and comprehensive care.
• Community care networks (CCNs) are similar to IDSs but tend to be community-based and nonprofit, while IDSs may not be.
• Managed care organizations (MCOs) have controlled healthcare contract negotiations for over 20 years.
• Hospitals joined together into integrated healthcare delivery systems to stop competing and gain negotiating power.
• Integrated delivery systems increased negotiating ability and created savings through operating efficiencies.
• Expanded size increased buying power, allowing for large purchases at discounted prices, saving money.
• Hospitals, primary care physicians, and specialists link preventive and treatment services through contractual and financial arrangements.
• Integrated delivery systems aim to offer coordinated care across healthcare services and settings.
• Integrated delivery systems focus on wellness and health promotion while eliminating intermediary costs.
• Integrated delivery systems provide "one-stop shopping" for healthcare services in one place or network.
• IDSs include hospitals, nursing homes, home care agencies, hospices, ambulatory care units, and physicians' offices.
• IDS networks represent the largest hospital systems in the country.
• Models of integrated delivery systems include group practices without walls (GPWWs), integrated provider organizations (IPOs), management service organizations (MSOs), medical foundations, and physician-hospital organizations (PHOs).
• Group practices without walls (GPWWs) allow physicians to keep their own offices while sharing administrative and management services.
• Integrated provider organizations (IPOs) manage and coordinate healthcare from various providers and facilities.
• Management service organizations (MSOs) provide support services like administration to individual physicians.
• Medical foundations are nonprofit organizations that contract with physicians to manage their practices.
• Physician-hospital organizations (PHOs) provide contract healthcare services between hospitals and doctors, also called "medical staff-hospital organizations."

Quality Assurance and Managed Care

• Quality assurance (QA), or quality management, ensures the delivery of quality care in healthcare facilities.
• Many healthcare facilities implement QA programs to meet quality standards.
• The National Committee for Quality Assurance (NCQA) was founded in 1990 to improve the quality of healthcare.
• The NCQA is a private, nonprofit organization that has become an industry leader in healthcare quality.
• The core values of the NCQA include improving healthcare, providing accountability, empowering customers with information, and providing excellent customer service.
• The NCQA is often called the "watchdog" for the managed care industry, assessing and reporting on the quality of managed care plans.
• The NCQA accredits organizations and provides performance measurement programs for managed care plans.
• Accreditation means a healthcare organization's policies, procedures, and performance are evaluated by an external organization.
• External evaluating organizations are called accrediting bodies, with the NCQA being an example.
• Accreditation ensures that a healthcare organization meets predetermined criteria and standards set by the NCQA.
• Voluntary accreditation means organizations are not required to be accredited by the NCQA to stay in business.
• NCQA accreditation is nationally recognized and has become the accepted standard for managed-care plans.
• Many large employers do business only with NCQA-accredited managed-care plans.

NCQA Accreditation Standards

• Access and service
• Qualified providers
• Staying healthy
• Getting better
• Living with an illness
• An oversight committee analyzes survey findings and assigns an accreditation level.

The Healthcare Effectiveness Data and Information Set

• The Healthcare Effectiveness Data and Information Set (HEDIS) is a set of standardized performance measures.
• Consumers and employers use HEDIS to compare the quality of managed-care plans.
• HEDIS provides information on consumer experiences with managed-care plans.
• Over 90% of America's health plans use HEDIS to measure performance on care and service.
• HEDIS data allows comparison of benefits and healthcare-related information from one plan to similar plans.
• HEDIS information is collected from managed-care plans through surveys, claims data, tracked data, and patient health records.
• Data from NCQA accreditation surveys and HEDIS provide a comprehensive overview of managed-care plans, by assuring consumers and others can choose plans based on quality.